Business plan

On

Pet Pals Pet Hotel

“Trust your pets with the Best”

Satdobato, Lalitpur

Contact Number: 01-5551877

Submitted By:
Pragya Budhathoki
Seeprata Parajuli
Quest International College
Pokhara University

Submitted on
November, 2018
 Acknowledgement

First and foremost, we would like to thank Quest International College for offering a course of
‘Business development plan’. The learning from this subject and project will surely be beneficial
to us in our career ahead.
We would like to thank our course facilitator, Ms. Karuna Tuladhar for providing us the perfect
supervision for our research at every step. Her explanation of topics, clearing of confusions,
correction of mistakes and strict guidelines helped us to complete this project. We would also
like to thanks Mr. Sohan Babu Khatri for providing us opportunity to do this practical task which
will give us immense knowledge on various area of starting business.
Lastly, we would express my deep thanks to everyone who directly or indirectly contributed in
the completion of this research project report.

Thank you

Sincerely,
Pragya Budhathoki
Seeprata Parajuli

i
TABLE OF CONTENTS
ACKNOWLEDGEMENT………………………………………………………………………………... I
TABLE OF CONTENTS……………………………………………………………………………….. II
LIST OF TABLES……………………………………………………………………………………..... IV
LIST OF FIGURES……………………………………………………………………………………....V
LIST OF ABBREVIATIONS AND ACRONYMS……………………………………………………... VI

1: Business Highlights…………………………………………………………………………....1
2: Executive Summary…………………………………………………………………………. 4
3: Background……………………………………………………………………………………5
4: Introduction………………………………………………………………………………….. 5
A. Vision………………………………………………………………………………………..6
B. Mission……………………………………………………………………………………...6
C. Values....................................................................................................................................6
D. Goals/Objectives...................................................................................................................6
E. Building Blocks of Business Model………………………………………………………...7
5: Service Description………………………………………………………………..................10
A. Service Description and History…………………………………………………………..10
B. Product attributes and benefits to the customers………………………………………….11
C. Research and Development effort and Background……………………………………….11
D. Product lifecycle and product category………………………………………………...…12
E. Costing and Pricing basis…………………………………………………………………12
F. Production Process in Brief……………………………………………………………….12
G. Quality Assurance and Control……………………………………………………………12
6: Industry and Market Analysis……………………………………………………………...13
A. Industry Structure and Market Characteristics……………………………………………13
B. Environmental Analysis……………………………………………………………………14
C. Five Forces of Market and its state in this industry……………………………………….15
D. Market and Competitor Analysis…………………………………………………………..16
E. Consumer and Demand Analysis………………………………………………………….18
7: Business Strategy……………………………………………………………………………18
A. SWOT Analysis…………………………………………………………………………….18
B. Analysis of Value Chain…………………………………………………………………...20
C. Business Strategy…………………………………………………………………………..21
8: Marketing Plan……………………………………………………………………………...22
A. Marketing Objectives and Goals………………………………………………………….22
B. Consumer Analysis………………………………………………………………………..24
C. Marketing and Growth Strategy………………………………………………………….26

ii
 D. Marketing Mix………………………………………………………………………...……
28
9: Production/Operation Plan………………………………………………………………....29
A. Location,
Premises……………………………………………………………………….....29
B. Infrastructure build up and Facilities/ Layout…………………………………………...…30
C. Time Plan/ Work Schedule……………………………………………………………….....31
D. Production/ Operation Process in Detail……………………………………………...…...31
E. Quality Control/ Assurance…………………………………………………………………
32
F. Research and Development…………………………………………………………………
32
10: Organization/ Management and Human Resource Plan………………………………...33
A. Organizational
Structure…………………………………………………………………....33
B. Communication
Structure…………………………………………………………………...34
C. Job Description of Key Positions and
Employees…………………………………………..34
D. Human Resource Management Aspects…………………………………………………….37
11: Financial Plan………………………………………………………………………………39
A. Financial Objectives…………………………………………………………………….….39
B. Assumptions made for financial estimations………………………………………….
…….39
C. Start Up Expenses and Investment/ Capital Structure……………………………………...40
D. Sales/ Revenue
Projection………………………………………………………………......40
E. Income Statement…………………………………………………………………………...42
F. Balance Sheet……………………………………………………………………………….43
G. Cash Budget…………………………………………………………………….………….44
H. Key Financial Indicators……………………………..……………………………………44
I. Investment Appraisal……………………………………………………………………...45
12: Risk and Contingency Plan………………………………………………………………..45
A. Key Risks in the business and Risk Management Plan……………………………………..45
B. Exit Strategy………………………………………………………………………………...46
13: Appendix……………...…………………………………………………………………….47
A. Details of Machinery and Equipments………………………………………………..…….47
B. Details of Furniture and Fixture……………………………………………………………47
C. Details of Inventory…………………………………………………………………………48
D. Details of Preliminary Expenses……………………………………………………………48

iii
E. Details of Profit Margin…………………………………………………………………..…
49
F. Details of Return on
Equity………………………………………………………………….49
G. Details of Return on Assets…………………………………………………………………49
H. Details of Total Assets Turnover Ratio……………………………………………………..49
I. Details of Fixed Assets Turnover Ratio…………………………………………………….50

iv
List of Tables: Page no.
Table1 Capital Contribution…………………………………………… 8
Table 2 Analysis Table………………………………………………… 18
Table 3 Analysis of Value Chain………………………………………. 20
Table 4 POP and POD…………………………………………………. 27
Table 5 Time Plan/ Work Schedules………………………………….....31
Table 6 Start-up Capital………………………………………………....40
Table 7 Capital Structure………………………………………………..40
Table 8 Revenue Model…………………………………………………40
Table 9 Calculation of depreciation of furniture and fixture……………41
Table 10 Calculation of depreciation of Machinery and Equipments…….41
Table 11 Details of Operating expenses…………………………………..41
Table 12 Income Statement……………………………………………….42
Table 13 Statement of Retained Earnings………………………………...42
Table 14 Balance Sheet……………………………………………………43
Table 15 Cash Budget……………………………………………………..44
Table 16 Ratio Analysis……………………………………………………44
Table 17 Net Present Value………………………………………………..45
Table 18 Internal Rate of Return…………………………………………..45
Table 19 Payback Period…………………………………………………..45

v
List of Figures: Page no.
Figure 1 Infrastructure Layout…………………………………………30
Figure 2 Operations Flowchart………………………………………....32
Figure 3 Organization Structure………………………………………..33
Figure 4 Vertical and Horizontal Communication Structure…………..34

vi
Abbreviations:
Accum: Accumulated
CA: Current Assets
CCTV: Closed Circuit Television
CV: Curriculum Vitae
Depn: Depreciation
E-mail: Electronic mail
E- recruitment: Electronic recruitment
FA: Fixed Assets
HR: Human Resource
i.e.: That is
Ms.: Miss
NBV: Net Book Value
no.: Number
Nrs: Nepalese Rupees
PAN: Permanent Account Number
POD: Point of Difference
POP: Point of Parity
Reg No: Registration Number
Rs: Rupees
SMS: Short Message Service
S.N.: Serial Number
Sq. ft.: Square Feet
USP: Unique Selling Point
%: Percentage

vii
Business Highlights
A. Name of the Business:
The business has been named as Pet pal’s Pet Hotel.
B. Nature of the business:
Pet Pals Pet Hotel is a pet sitting service provider that deals with pet boarding, grooming
and day care facilities. We strive to provide pets with a secure and caring environment
away from their homes which will provide peace of mind to pet owners when they cannot
be at home with their pets. Our services will always exhibit professional conduct,
integrity and responsibility for pets under our care.

C. Legal status of the business:

Reg No: 23782

PAN: 98765

D. Date and Place of Registration :

28 February, 2018, Lalitpur District

E. Address of the Office:

Satdobato, Lalitpur
F. Contact:
Following Persons can be contacted at the given address and numbers:

Pragya Budhathoki
Satdobato, Lalitpur
9845589215
budhathokipragya@gmail.com

Seeprata Parajuli
Bagdol, Lalitpur
9808401895
pseeprata@gmail.com

Office contact:
01-5551877

G. Major Service:

We offer pet boarding, daycare and grooming facilities to pets in a secure and caring
environment according to the needs specified in ways that exhibit professional conduct,
responsibility and integrity. Pet Pals pet hotel provides pick up and drop facilities too for
the convenience of our customers. We have professional and well- trained trainers and
groomers taking care of pets in your absence providing you a state of mental peace. We
have veterinarians visiting our pet hotel not only at times of emergency but according to

1
 the age and need of pets under our care to check for any parasites, infections or illnesses
or any kind of vaccination needed.

H. Target Customers:

We have segregated our target customers on the following basis:

o Demographics
a) High income group
b) Working Class
c) Frequent Travelers

o Psychographics
a) Busy Lifestyle: Owners busy schedule do not need to clash with your pet’s need! Give
your pets attention they deserve with our service.
b) Pet Lovers, who think pets as their family
c) Who don’t feel hesitate to spend on their pets

o Behavioral
a) Occasions in the family, where owners can’t keep proper care of their pets and can’t give
them time

I. Major Market:

a) Kathmandu, Bhaktapur and Lalitpur

J. Working Schedule:
7 days in a week except some major festivals and unavoidable circumstances

K. Human Resource:
For initial we have allocated 3 staffs

L. Number of shareholders: 2

M. Total Investment: Rs 671220

N. Milestones of achievement:

ONE YEAR GROWTH PLAN

 Veterinarian technician on staff to administer vaccinations on specified days and tend to
any unforeseen emergencies.
 Internet access to watch your pet online.
 Monthly newsletter.

2
 Weekly play hour.
THREE YEAR
 Expand the number of overnight cages for pets
 Mobil pet wash-will go to pet owners home to wash their pets.
FIVE YEAR
 Expand our branch out of valley as well
 Tie up with various organizations and be the change maker in the particular field by
providing efficient service.

O. Capital Structure:
Table no.1: capital contribution

Investor’s Name Investment Amount % Contribution

Pragya Budhathoki 335610 50
Seeprata Parajuli 335610 50

3
2. Executive Summary
Pet Pals Pet Hotel is a full-service pet care facility dedicated to consistently providing high
customer satisfaction by rendering excellent service, quality pet care, and furnishing a fun, clean,
enjoyable atmosphere at an acceptable price. We will maintain a friendly creative work
environment which promotes comfort and well-being of pets.
The timing is right for starting this new venture. Pets are playing a larger role in our lives, and
working people are choosing to provide them with a good life. Loving families with active pets
and an active conscience are in search of better lives for their pets and peace of mind for
themselves, causing busy pet lovers to flock to an ever-growing number of pet care facilities. For
customer convenience, in addition to day care, Pet Pal’s will include overnight care, in-home
care, wash your own, pet grooming, animal behavior, pet portraits, gift and pet specialty
products, and special requests, all at one facility.
Ms. Pragya Budhathoki and Ms. Seeprata Parajuli will be operating the business of Pet hotel in
Satdobato, Lalitpur with the investment of Rs. 671220. The capital will be contributed by both
the owners equally (i.e. 50% each). The business will be having breakeven point and making
profit in its first year itself. Basically, the business is designed to provide a premium service so, it
will be targeted to pet lovers with higher income and who do not hesitate to spend certain sum on
their pets, who treat their pets as their family. Frequent travelers who always have to worry about
where to leave their pets will also be benefitted by this business.
Our business will help busy pet owners to relieve their anxiety of leaving their pets behind alone.
They can be carefree for their pets once they bring their pets to Pet Pals Pet Hotel. The care will
be given to their pets on homely environment and updates will be made available as upon the
request of the owners. The marketing for the business will be done through social media,
pamphlets, word of mouth and also we will be having link with various pet items suppliers.
If everything goes well and good and business goes on profit then the business will be expanded
outside the Kathmandu valley as well. Owners have further planned to come up with better
facilities, better and customized service which will be loved by the pets and their owners in the
later years. The main motive of the business will be that no pet owners should be hooked because
of their pets they can freely do their works, complete their work taking enough time and come
back home stress free without worrying what their pets would be doing.

4
3. Background:
The pets care hotel industry is one that doesn’t have any companies with a dominant share in the
market. The industry has witnessed wonderful growth in abroad but still no ideas have been seen
being utilized in this sector in Nepal. The kind of pets that we are keeping in our pet hotel ranged
from bird, cat, dog, fish, tortoise and small animals as these are the pets owned by majority of
people in Nepal.
The changing demands of customers for new luxury pet services is thought will greatly benefit
the industry and the trend is expected to continue to gain momentum even till 2021, especially as
it is projected that pet ownership will increase and that more people will increase the disposable
According to IBIS World, the pets boarding industry is one that is in its growing life cycle,
which has seen more businesses start up and more people being employed. Also, the industry has
seen operators introduce niche luxury services for pets over the past five years, which has
contributed to the profit seen in the industry.

4. Introduction:
Having the right business structure is very important to us here at Pet Pals Hotel because we are
concerned with getting the business started on the right foundation that will allow for smooth
business operations. It is for this reason that we sought for and hired the best employees that are
not only competent and have the right experience but understand the business thoroughly and
have great passion for caring for pets.
Our employees know and understand our vision as a company and are committed to ensuring
that we become the preferred pets’ hotel for pet owners here in Kathmandu. We are committed to
ensuring that we properly pay our employees the right salary and wages and that their other
welfare packages including their insurance are up to industry standards. We know that the right
pay would improve productivity for our pets’ hotel business.
Asides from paying them well, we also intend to ensure that they receive continuous training that
will not only enhance their skills and improve productivity for us but also improve their skill set
in the overall industry and also be able to handle all the different tasks that will be assigned to
them due to the various services we are going to be offering.
Therefore, below is the business structure we intend to build at Pet Pals Pet Hotel;

 Founders
 Pets Hotel Manager
 Accountants
 Customer Service Executive
 Pet Care-takers
 Pet Groomers
 Security Guard
 Cleaners

5
A. Vision:
Our vision is to provide the safest and conducive boarding facilities for pets and be the preferred
pets’ hotel here in Kathmandu.
B. Mission:
To provide excellent animal care in a pet friendly atmosphere while ensuring our customers, both
pet and owner, receive excellent service in a playful safe environment. We will be the leaders in
the market of Pet care for the upscale community by providing a positive environment for the
animals that we house. Our operations will instill in owners confidence in our ability to care for
their pets in appropriate ways. We will control significant market share and increase profit as we
grow and expand. We will develop our business conservatively, financing our growth through
operational revenue.
C. Values:
We provide security to pets, when owners are out of home they can bring their pets to us to
safeguard life of their pets. Pet Pals assure Hassel free service, as owners may think there would
be many pets in the care centre that might hurt our pet but we provide systematic service and
maintain balance between different pets. It will help customers decrease in sense of urgency; if
pets are brought to us then owner should not rush to their home worrying about their pets from
wherever they are. They can conveniently finish their work and plan activities accordingly. Our
service will provide convenience to the owners as they should not worry about their pets while
going out or on their busy schedules. We provide beautiful centre and ambience for pets where
owners can rely upon. Customized services upon request are also provided. We will be sending
pictures of pets on timely basis so that owners feel relief about safety of their pets.

D. Goals/Objectives:
o Short Term-
A. Inaugurate full-time pet handling program
B. Membership in Pet Association
C. Increase boarding & grooming income
D. Advertisement for pet care and handling

o Medium Term-
B. Expand the number of overnight crates for pets
C. Mobile pet wash-will go to pet owners home to wash their pets.
o Long Term-
o Expand our branch out of valley as well
o Tie up with various organizations and be the change maker in the particular field
by providing efficient service.

Objectives: To attain our goals through customer satisfaction, diligence and positive,
progressive customer relations.

6
E. Building Blocks of Business Model:
o Value Proposition Canvas
Customer Jobs:
1. Functional
 Appropriate place to leave pets: Customers find appropriate place to leave their pets
in their absence.
 Decrease worry: Customer worries decreases for their pets as they feel their pets are
in safer hands.
 Once they leave their pets in our pet hotel they can pick up their pets with ease once
they are completely done with their work.
 Convenience: If pet owners are in a hurry or unavailable due to certain causes to
bring their pets to us then we provide pick-up and drop facility too which creates a
convenient environment.
2. Emotional
 Safety: Customers feel safe about their pets when they need to go out. They feel safe
about their pet life, feeding them, looking after them.
 Staying connected to pets: Pet Pals pet hotel sends photos and videos of pets to their
owners occasionally as well as on-demand.
3. Social
 It provides a sense of social prestige to the customers. Customers feel that keeping
their pets in pet hotels will add value to their social status.
Gains
1. Peace of mind for the owners, as they feel secured about their pets.
2. Safety, in a sense of their security
3. Health safety of pets
4. Relieves anxiety of the pets
Pains
1. Owners may feel unsure regarding the credibility of care takers.
2. Owners may feel that their pets may have problems staying together with other pets.
3. Our location may be unfeasible for some pet owners.
Gain Creators
1. Pet Pals pet hotel can put their mind at ease, knowing the pets are being well cared for by
professionals while they’re at work, or even if they are running errands.
2. At our pet hotel, the staff keeps a close eye on pets to make sure that they are safe from
themselves, other pets and accidental situations.
3. Pet Pals pet hotel ensures that all pets under our care have the proper vaccinations against
infections and parasites and flea prevention as well as control so that they do not spread
any infections or illnesses to other pets.
4. Pets under our care are provided enough mental and physical stimulation to dramatically
reduce, if not eliminate, negative behaviors associated with boredom and anxiety.

7
Pain Relievers
1. Pet pals pet hotel is under the surveillance of CCTV. The activities of care takers can be
monitored by pet owners as and when demanded.
2. We have different care takers and crates for varieties of pets.
3. We provide pick up and drop facility for those pet owners who find it unfeasible to come
to our pet hotel.
Services
1. We offer pet boarding, daycare and grooming facilities to pets in a secure and caring
environment according to the needs specified in ways that exhibit professional conduct,
responsibility and integrity.
2. Pet Pals pet hotel provides pick up and drop facilities too for the convenience of our
customers.
3. We have professional and well- trained trainers and groomers taking care of pets in your
absence providing you a state of mental peace.
4. We have veterinarians visiting our pet hotel not only at times of emergency but according to
the age and need of pets under our care to check for any parasites, infections or illnesses or
any kind of vaccination needed.

o Business Model Canvas

Customer Segments:
o Demographics
d) High income group
e) Working Class
f) Frequent Travelers

o Geographic
b) Inside Kathmandu Valley

o Psychographics
d) Busy Lifestyle: Owners busy schedule do not need to clash with your pet’s need! Give
your pets attention they deserve with our service.
e) Pet Lovers, who think pets as their family
f) Who don’t feel hesitate to spend on their pets

o Behavioral
b) Occasions in the family, where owners can’t keep proper care of their pets and can’t give
them time
Value Proposition:
 Security, when owners are out of home they can bring their pets to us to safeguard life of
their pets

8
  Hassel free service, as owners may think there would be many pets in the care centre that
might hurt our pet but we provide systematic service and maintain balance between
different pets
 Decrease in sense of urgency, if pets are brought to us then owner should not rush to their
home worrying about their pets from wherever they are. They can conveniently finish
their work and plan activities accordingly
 Convenience to the owners as they should not worry about their pets while going out or
on their busy schedules.
 Beautiful centre and ambience for pets where owners can rely upon
o Customized service upon request
o We will be sending pictures of pets on timely basis so that owners feel relief about safety
of their pets
Customer Relationships:
o Increase trust with customers
o Service with care of pets is all owners want. So if we will be able to provide proper care
to pets then it will help in building relation with customers
o Responsiveness towards pet would help to build good and strong relation with customers
Channels:
 Marketing channels
i) Social Media (Facebook, Instagram, Twitter), we will be advertising about our
business through various social media platform
ii) Word of mouth
iii) Pamphlets
iv) Audio Advertisements (Radio Advertisement)
 Distribution Channel
i) Land
ii) Building

Key Activities:
 Social Media Activities, we will be promoting our business through enough social media
activities
 Pick-up and Drop facilities
 Safe handling of pets
Key Resources:
 Physical Resources
a) Land, we have our own land for pet hotel which would make us easier to open hotel by
minimizing the cost on which we should invest most
b) Building, The land we are going to start our pet hotel have small building as well which
will be operated for our office and for pets as well whenever needed.
c) Pet Toys
d) Crates
e) Feeding Utensils
9
  Human Resources
a) Care takers
b) Groomers
c) Cleaners

Key Partners:
 Veterinarians, as we are pet care centre we must keep alliance with veterinarians if some
pets get unwell.
 Pet food suppliers
 Pet Groomers
 Crate Suppliers

Cost Structure:
 Marketing cost
 Transportation cost for pickup and delivery of pets
 Salaries
 Regulatory cost includes cost that comes on regular basis while running a day to day
business. Office costs are also included and the telephone and internet connectivity costs
are included as well.

Revenue Streams:
 Service Charge
 Commission, we keep advertisement boards of various pet foods, accessories shops and
so on and charge commission to them which will help us generating our revenue
 Merchandise sales, we also sells various pet foods, toys and different accessories of pets.
If owners want they can just pick them from us.
 Pick-up and Drop charges

5. Service Description:
The focus of Pet Pal’s is day care and overnight care. Our business atmosphere will be clean,
friendly and upscale where customers will be comfortable leaving their pets. There are no such
service providers in market yet so we will try to facilitate our customers as much as possible.

A. Service Description and History

Pet Pal’s will be considered an upscale, full-service animal care facility. We will offer a wide
range of services, not limited to dogs or cats. Services are as follows:

 Overnight Care: Leave your pet for as long as necessary for 24 hour care and attention.

10
  Day Care: Provide 3,000 sq. ft. for a fun, safe atmosphere for pets to spend the day
exercising and enjoying the company of other pets.
 Wash Your Own Pet: Provide four tubs, brushes, environmentally safe shampoo, dryers
and aprons for clients who bring their pets in to wash.
 Pet Grooming: Provide on-site professional pet grooming services.
 Animal Behavior Courses: Provide certified animal training courses for the beginner,
intermediate, and advanced.
 Pet Portraits: On-site portrait opportunities.
 Gift Shop: Provide specialty pet-related gifts and products.
 Special Events: Coordinate pet birthday parties or any other special occasions on-site or
at a location of choice.
 Special Requests: Provide service for pets with special needs including administering
medication, assisting with recovery from surgery, handicaps, etc.

B. Product attributes and benefits to the customers:

 Appropriate place to leave pets: Customers find appropriate place to leave their pets in
their absence.
 Decrease worry: Customer worries decreases for their pets as they feel their pets are in
safer hands.
 Once they leave their pets in our pet hotel they can pick up their pets with ease once they
are completely done with their work.
 Convenience: If pet owners are in a hurry or unavailable due to certain causes to bring
their pets to us then we provide pick-up and drop facility too which creates a convenient
environment.
 Safety: Customers feel safe about their pets when they need to go out. They feel safe
about their pet life, feeding them, looking after them.
 Staying connected to pets: Pet Pals pet hotel sends photos and videos of pets to their
owners occasionally as well as on-demand.
 It provides a sense of social prestige to the customers. Customers feel that keeping their
pets in pet hotels will add value to their social status.

C. Research and Development effort and Background:

Research and Development involves researching the market and customer needs and developing
new products and services. Businesses that have Research and Development strategy have a
greater chance of success than businesses it doesn’t. As the concept of pet care hotel is new in
the context to our country we encounter new developments, innovations, improvements in
existing processes and learn with the every passing time. Development is a continuous process of
improvement which can only be achieved by a highly qualified and well-trained staff. The
strategy can lead to improvement and increased customer awareness and trust towards the
business that we are targeting and the market where we are operating.

11
D. Product lifecycle and product category:
When it comes to the Pet care services, it is still in the development or introduction phase in
Nepal, as it is still relatively unknown and non-existent. During this phase of the life cycle the
key success factors tend to be good commercialization, for example excellent customer treatment
or making the brand known and appreciated. In this case, having good references is the most
important success factor, as proven by the questionnaire answers. This can be concluded both by
the fact that all of the people who have used either service choose references as an important
factor and because a reason mentioned often by those not interested in the service is a lack of
trust in strangers. Another reason for the importance of references in this business is that they
will allow the company to extend its customer base at a low cost. As a consequence, loyalty is
another critical success factor, as that loyalty will lead to references. To obtain loyalty the
company has to be considered trustworthy in the clients’ mind.

E. Costing and pricing basis:

The pricing of our business is based upon the service taken by the customers. We have planned
to charge our customers on per day basis for the pets brought for the day care. If pets are brought
for overnight stay then the price is slightly increased and upon the customized service requested
by the customers the price will go in increasing trend. Talking about the overall cost for the
service our business will be taking premium charges.
For customers taking day care service we have planned to charge Nrs. 1500 per day and for
customers willing to leave their pets overnight will be charged Nrs. 2200 per night. If owners
customized the required service the price will increase accordingly.
F. Service Process in brief:
The process starts with interaction with customers. They will visit to Pet Pals hotel to know
about its service in details and to look for the environment. Then the process of pet enrollment
will take place where pets will be admitted for a day/night or some days/nights by filling forms
and following procedures. Then, The pets will be dropped by their owners at the hotel or if they
cannot do that then the hotel will provide them with pick up facility. The pets will be taken care,
groomed as per the service taken by the owners during their stay in the hotel. Finally, they will
be dropped back to their owners or owners will pick-up their respective pets.
G. Quality Assurance and Control:
Pet Pals believes in providing satisfaction to its customers through efficient service. We assure
quality in our service through following ways:
 Random check of employees work and service
 Providing training for employees for better performance
 Making sure that pets with any communicable or infectious disease are not enrolled
 Separate care to different types of pets in separate units
 Pets are provided with hygienic environment throughout their stay

12
  Special care on their food, sanitation and how they act with other pets

6. Industry and Market Analysis:

A. Industry Structure and Market Characteristics:

This industry includes taking care of pets for those owners who loves pet but could not devote
their time to their pets. After the business begins its operation, the company will focus on
modification and changes in operation strategy to certain standards will add certain services and
try to maintain and meet the customer demand. Major focus of the business will be providing
better quality service to customers and gain maximum satisfaction.
The business charge premium and is focused to high income customers who thinks pet as their
family as the awareness among the people in the market regarding our business is spread they
will be attracted to acquire the service. However, only niche market will be benefitted by the
service so this service will not be helpful to cover every part of the society. But for upper class
and high income people the service will be providing convenience and decrease their tension
related to their pets if they are travelling somewhere and they could not give time to their pets.
The pet care market which is sometimes referred to as pets’ boarding provides pet care services
which includes boarding amongst other activities. This usually includes animal shelters and pet
boarding. This business caters to pet owners who have to go away for a while either due to
personal, medical or business reasons and usually need somewhere their pets can put up for the
duration of time they are away.
There are currently five business facilities concerned with pet care inside Kathmandu valley. But
all these businesses are providing day care facilities to only one kind of pet i.e. dog. Also, their
main focus in on breeding of dogs and daycare rather than providing them overnight boarding as
well as grooming facilities in the absence of loving pet owners. But currently, there are no any
pet care centers providing overnight care to various kinds of pets. This has caused a need for
growth in this market as pet owners would want their pets to be properly taken care of by
professionals while they are away.
Another trend with pets boarding services is the fact that most of those in this business usually
offer other services that would complement their core service. The offering of other services is
also a way of not only adding more revenue and boosting the bottom line; it is also a way at
ensuring that the business gets more customers and inadvertently a huge share of the market.
Finally, due to intense competition in this industry from large scale dog boarding businesses to
the individual people going into this business, the stakes have increased in trying to gain a huge
share of the market, as strategies keep cropping up as businesses seek to attract more customers
to patronize their services.
Most pet hotel businesses have either started lowering the prices, offering one or two of their
services for free in order to gain customers, or going into a niche market where there aren’t too
many competitors in order to stand out from others offering the same services. This has led to
diverse services being offered and also made the industry to become vibrant and more recession
proof.

13
B. Environmental Analysis
PESTLE Factors and their descriptions
In order for a business plan to be believable it is necessary to have analyzed the external
environment that will surround the company. A useful tool for this task is the PEST analysis,
which structures the study by dividing the external environment in four points within which the
relevant factors can be analyzed. The factors studied are Political and Legal, Economical, Social
and Technological.
Political factors
The political scenario in Nepal has been volatile since more than a decade. The ten year civil war
has caused many businesses to close down and the donation drive from political parties squeezed
the profits of many businesses. Succeeding in business meant having close ties with one or more
political parties. Political factors influence businesses in several ways, creating advantages as
well as disadvantages.
One of the reasons for the tardy progress of our economy is the constant strikes or bandhs often
instigated by the political parties. A large number of industries and businesses have closed down
because of the rampant bandhs and lack of a work culture among the workers. . It is a fact that
over 40 per cent of the industries were closed during the insurgency period. The situation of the
remaining industries further worsened in the aftermath of the insurgency. Strikes or shutdowns
not only affect the micro economy, but also weaken the entire business environment. Hence, the
provision to prohibit strikes is essential to ensure a business-friendly atmosphere in Nepal.
Economic factors
The economic condition of majority of people in our country is poor. This is because of the low
per capita income resulted due to slow economic growth rate. Still today, not all people can
afford even the basic facilities of housing, clothing and fooding in our country. In this situation,
the economic factor is bound to restrict a number of people from accessing our services.
However, we believe that it will not have a significant effect in our business. The major reason
being our target market i.e. professionals and families based in Kathmandu valley who need to
travel on a regular basis. In contrary to rural areas, the living standard of people residing in the
valley is improving every day. Due to this, their purchasing capacity has also increased making
them able to pay for these premium services.
Social factors
Nowadays, there has been a rapid change in the lifestyle of people. Most of the people today,
consider animals as their family member rather than just a pet. The values regarding animals and
their significance are changing. As a result, people are more willing to pay for their pets and their
well-being. Also, family structures are changing from joint families to nuclear families making it
difficult to look after pets when the entire family needs to travel somewhere. The growing
distance between people even in the same neighborhood has made it difficult to approach them
for looking after the pets in their absence.
Due to these reasons, a pet care and boarding business like ours is certain to make an impression
over the market and provide a better alternative to pet owners.
Technological factors

14
Technological advances have greatly changed the manner in which businesses operate.
Technology infrastructures such as the internet, telephone, smart phones which transmit and
record information have changed the structure of businesses.
In our business too, we have considered the technological factors and their possible contribution
in our business. Looking at the impacts technology can have in a business, we have planned to
make use of the existing technology in the field of operations and marketing.
Under marketing, CCTV surveillance cameras will be installed in the premises of our business
location. This will ensure that pets are being properly handled and cared for. Likewise under
marketing, we will be making extensive use of Facebook and Instagram for providing
information to customers about our business.
Legal factors
Every business in our country will have to be legally registered with the concerned body before
its commencement. No activities can be started before formally completing the registration
process. Pet Pals pet hotel will also be legally registered and abide by all the laws and regulation
regarding setting up and operating the business. The registration charge will be paid to Company
Registrar’s Office under the Company Act 2063. The tax payment system will be properly
analyzed and paid in time. There will be no illegal activities taking place in our business facility.
But since there are no specific laws and regulations for pet care in our country, the regulations
regarding meeting the standards of food, care, health care facilities, and safety being provided to
pets are quite unclear.
Environmental factors
The global concern for environmental protection is on the rise. We should operate our business
in such a way that there is as much less impact on the environment as possible. Since Pet Pals pet
hotel will have to deal with pets and their urination and defecation, we will make sure it is
properly dumped without harming the environment.

C. Five Forces of Market and its state in this industry

1. Threat of new Entrants

In an economy where many people are unemployed and struggle to find work, creating your own
company can be an attractive idea. Pet care business is even more attractive due to requiring very
little in terms of initial investment, and many people have a love of animals which makes
spending time with them fun. The biggest barrier to new entrants in this business is the difficulty
people having in trusting strangers to take care of pets in their absence. A company already in the
business with a client list that can give references has an advantage and most likely some loyalty
from their clients. As such, the threat of new entrants in this business is Medium-High.

2. Threat of Substitutes
The threat of substitute is the threat that the client, instead of coming to us or a competitor, will
use a different service to take care of the same need. More specifically, if the client is unable to
take the dog for a walk, or if he or she will be away from home for some time and cannot take
the pets with him or her, a need is created. The options that potential clients can take are to ask

15
for help from their family, friends or neighbors, to take the animal with them when going away,
to leave the animal at a kennel or a cattery, to leave the animal at a hotel or even with a
veterinary. The advantages and disadvantages of each of these substitutes will be analyzed later.
As there are many potential substitutes available for the client, the threat of substitutes in this
business is high.

3. Bargaining Power of Buyers

In this business, the buyers are of critical importance, as there is some competition; information
is easily accessible, mostly through the internet; there are several substitutes and there is a very
high price sensibility. However, there is not a high likelihood of the customers to switch
companies, due to the level of trust in the company being extremely relevant, as pets are
considered beloved members of the family for many people and the fact that the service involves
allowing company workers into the client’s house. In conclusion, despite the lower probability of
trading companies, the power of the buyers is still High, especially as references are very
important in this business.

4. Bargaining Power of Suppliers

The company’s potential suppliers are pet stores, which sell animal food and other pet
accessories. They are not necessary in all situations, as some customers can have preferred
brands of animal food for their pets, or even be the ones to buy the food. There are also several
options available to the company, with little differentiation between the different stores. As a
result of this, the bargaining power of suppliers is Low.

5. Rivalry within Industry

. As it is a service, the most differentiating aspect is the people who provide the service and the
amount of trust they inspire in the clients. Already established companies, which have gained
trust from their clients through trustworthy workers, have the advantage of loyalty and good
references. However, due to current economic situation of the company, differences in price are
felt strongly. The intensity of rivalry in this business is Medium.

D. Market and Competitor Analysis

To be able to analyze the existent competition there is a need to consider what the other options
are, when potential clients need the company’s services. If someone is unable, for any reason, to
look after their pets, their first option will be to ask their family, friends or even neighbors if they
are available. If no one is available the only other option is to search for an alternative like a pet
hotel that will care for the pets in owner’s absence.
Pet Pals is the first Pet care hotel facility of its kind in the country. Never before has there been a
place where a pet owner could take their pets to be cared for, for the day or overnight. The owner
feels no guilt in leaving the pet because it is a secure, safe and fun environment. However, there
are some kennel clubs inside the valley but they provide care facilities to dogs only but we are
providing facility in caring all types of pets. So, the strength for our business can be it will attract
number of clients who are really having problem to adjust their pets on their busy schedule. On

16
the other hand, weakness can be due to lack of awareness about our pet hotel as owners might
hesitate to bring their pets in and may not fully rely upon.
Family, friends and neighbors:
This is without a doubt the cheapest option and one where the client trusts the one taking care of
their pet, giving the owner a certain peace of mind. However, it can be hard to find someone who
is available and after several times, it may be hard to keep asking that favor. There might even
come a time when no one is available and the pet owner really does not have this option. In the
case of our business, owners will have to make a call or drop their pets to our pet hotel where
well trained and professional pet handlers and groomers will look after them.
Kennels Clubs:
Another option available is to pet owners is to leave the animals at kennels clubs. There are
currently five kennel clubs inside the valley. However, as these entire kennel clubs specifically
only take in dogs it may not be suitable for other pet owners leaving them with no alternative.
Likewise, these businesses are more concerned on breeding and day care rather than providing
overnight care and grooming as well. As our business is concerned with looking after a variety of
pets taking care of their needs specifically, it will certainly be a better alternative to these kennel
clubs.
Pet Pals Pet hotel
Pet Pals pet hotel is unique in its way as it caters to the needs of different pet owners, will have
better conditions and provide the animals with all of the things they need. In this case, the owner
can go on a holiday and know that their pets are being taken care of and being very well treated,
as they are guests. However, sometimes the owner may not be sure if the animals are being
treated as good as he or she wants, considering that hotels have many pets to take care of at the
same time. But in our pet hotel, the owner might have a look at the footages through CCTV
camera to know how their pets are being handled. Due to these facilities provided including
overnight care and grooming, we will be charging premium price to our clients.

Analysis Table
To better be able to understand the differences and compare between the different possibilities,
following table represents the most important of the previously discussed aspects with a
numerical value attached. The values are 3 for the Best options, 2 for the Medium ones and 1 for
the Lower ones.

Table no. 2: Analysis Table

Disease
Price Trust Availability Stress Average
Risk
Family/Friends/Neighbor 3 2 1 2 2 2
s 17
Taking the Pet 1 3 3 2 2 2 .2
Kennels 3 1 2 1 2 1.8
Pet Pals pet Hotel 2 3 3 3 1 2.4
After creating the average and assuming that each of the six aspects (Price, Trust, Availability,
Stress and Disease Risk) has the same level of importance, it is clear that the Kennels are the
least attractive option. The most attractive options are ‘Pet hotels’ followed by ‘Family, Friends
or Neighbors’. The reason for this is that while the first are much better in terms of costs when
compared with the later, their trust, and disease risk and availability is low.

Consumer and Demand Analysis:

o Consumer Segmentation:
Consumers are segmented on the basis of variables like income, emotion and so on.
Basically, the customer with high income group who have to travel frequently or have
busy schedules, who loves keeping pets but cannot manage time for them are targeted.
Also, the customers who treats pet as their family members and are ready to spend certain
amount on their pets are also taken into consideration for the business.

o Projection of demand in the industry:

As the craze for pets is increasing day by day and people are also getting busy we have
projected that the demand for the business will go on increasing trend. However, in the
initial years of the business we may receive few pets for the services but as the year
passes by and the people will start knowing about the business them there is maximum
chance that the demand will also increase. As the people with pets are seeking different
alternatives, depending on friends, relatives and neighbors to look upon their pets in their
absence so, if people will know about Pet Pals then business will definitely attract
customers.

7. Business Strategy:

A. SWOT Analysis:
Below is the result of the analysis that was conducted for Pet Pals Hotel:

I. Strengths:
We have several strengths working for us and they include the fact that we have a strong
relationship with pets associations and veterinary clinics, as well as pet stores. Our team
takes good care of all the pets at our facility as there is no issue of neglect or cruelty on
any of the pets. Also, due to our excellent and efficient services, most of our customers
are highly loyal to us and we have retained a high number. Finally, we have a competent
and professional team who are well trained to handle all the pets and who have the right
expertise necessary to ensure that we remain in business.

II. Weaknesses:

18
 Since we are relatively new in the market and customers are not much aware about us yet
it will be difficult to reach and make customers aware about our business. As we are new
in operation we have a limited marketing budget and so might not be able to carry out all
the marketing activities and strategies we intend to for now. Also, as much as we would
love to board every pet, we won’t be able to do so based on the fact that we have limited
capacity and adjusting every kind of pet will be tough task so limited pets are to be taken
care in our pet hotel.

III. Opportunities:
This is a growing market and more opportunities exist for us as not everyone is aware of
our existence; this means we would intensify our efforts at creating publicity for our
business. Another opportunity stems from having fixed costs no matter the number of
pets we board.

IV. Threats:
Facing threats is what every business new or existing should expect an so every serious
business should be prepared to handle whatever threats are likely to crop up during the course
of running the business. The threats we are likely to face include arrival of new competitors
into the same area and location, a slump in the economy which will result in less people
wanting to spend extra on their pets and disease breakout amongst pets in the boarding facility.

19
B. Analysis of Value Chain:
Table no.3: Analysis of Value Chain

Support Firm Land, Building, Branding Contributio

Activitie Infrastructure n Margin
s

Human Resource Receptionist, Accountant,

Cleaners, Groomers, Care takers,
Security Guard
R&D Customer Preferences, Customer
feedbacks, New marketing
strategy
Procurement
Primary Inbound Process Outbound Marketin Services
Activitie g
s
Pet foods, Receivi Delivery Social Extensiv
Toys, ng and pick- Media e
Accessori clients,up of pets promotio customer
es, n, care
Taking
Distributi through
care of
ng care of
pets,
pamphlet their
Providi s to pets,
ng relevant High
customi offices, value to
zed communi customer
service cation feedback,
if through Discount
request e-mail, s to
er by telephone regular
clients . customer
s

20
C. Business Strategy:
a. Strategy Diamond

Strategy Diamond model helps in making good strategies for the business which includes:
Arenas:
We will be competing on service sector where we will focus on pet care. Though similar
competiting business are not yet seen in our country but other factors such as people trusting
their neighbors, friends with their pets can have influence in our business. In order to reach our
targeted customers we will be using various marketing channels like word of mouth
communication, interaction and participation on social Medias like Facebook, Instagram and so
on. Audio advertisement and pamphlets distribution will also be given equal emphasis.
For our distribution channel we have land and building where we will let pet brought in our hotel
enjoy during the day time in spacious, fresh environment in open land and for the pets to stay
overnight we have comfortable and cozy rooms for them.
Basically, we are targeting people with high income and who have busy schedules, are pet
lovers, treats their pet as family members and does not hesitate to spend certain amount on their
pets. So, we will mainly be targeting premium customers. For initial start-up we are targeting the
customers of Kathmandu, Bhaktapur and Lalitpur.
We will be emphasizing on creating good relations with customers so that they feel safe and
secure leaving their pets with us. We will also generate efficient value among the customers so
that they can be our repetitive customers and we will be showing responsiveness towards the pets
so that customers will have trust among us.

Vehicles:

Our business is of partnership nature. We are two partners involved in the business currently. For
start our business we have our own land and a building. We need to renovate our building for
commercial purpose and land needs to be maintained as well. So, we are able to minimize cost
for our business through this and it will be easier and faster for us to run our business as we have
in built infrastructure for our business. We will be registering and accessing license to our
business as well so that no legal obstacles will emerge in our business and we can operate it
legally. Further, if our business goes well then we can expand it to other part of the country as
well and add more partners in the business as well.

Differentiators:

One of the major USP of our business is that we are providing care to the variety of pets whose
owners are unable to look after them because of their busy schedules and their frequent travelling
schedules during day time as well as night as well. Yet, there are no any business providing these
kinds of facilities. Even we provide pick up and drop facility for the pets whose owners can’t
manage time for this as well. Any kind of customized service will be provided to the pets upon
the request of owners. Owners can fully rely upon us while leaving their pets with us because we
care their pets in friendly and homely environment.
As the concept of this business is still new in our country we will try to aware as much as we can
through various means of marketing and advertising so that they could know how convenient this
business can be for the owners of the pets who are really having problem maintaining balance
21
between their time to work and their pets. Our business will also greatly focus on customer
service. As having great relation and building trust among the employees will be very essential
factor for our business. So, customers will be provided with great service in order to satisfy them
and retain them.

Staging:

Once our business gets started and we started doing well in our business we will expand our
business seeing the demand of customers but we have kept this in our long term goal. Our
current focus will be on awaring the customers about our business and attracting the customers.
When we feel the business is now doing well then after 3 years we can think of expanding our
business further.

During the time till we expand we will be taking various initiatives like building various
networks, taking memberships in animal associations, creating links with veterinarians, food
suppliers and other partners so that they can also help to boost our business. We can further
conduct feasibility study for suitable places to expand our business. We can also tie up with
some big organizations and make agreement to keep pets of their employees in our hotel.

Economic Logic:

Our business is competing in high cost basis because we believe that we are providing
convenience service to our customers with unique features. We are targeting customers with high
income and who are willing to spend certain income on their pets, who treat their pets as their
family. So, they would want their pets to enjoy variety of service and can spend to see their pets
having fun so they will require customized service as well and they are ready to pay for that. We
are providing any kind of facilities to pets that their owners wants them to experience while
being in our hotel. We want our quality to match with the expectations of owners so that they
don’t feel sorry to pay us any sum of money.

8. Marketing Plan
Marketing goals
 To add new members.
 To create distinctive market presence.
 To increase media coverage to at least 5 stories in media in 2019 to grow public
awareness

Marketing Objectives
 To increase the number of members by 20% by the end of the year.
 To increase social media promotion by 10% by the end of the year.

22
Marketing strategy
We realize the success of Pet Pals Pet hotel will have to be determined by doing more than
taking care of pets under our care and providing day care as well as boarding facilities. We will
utilize a marketing plan to build customer demand. We will continually seek to attract more
customers by being proactive rather than reactive in our marketing efforts and be sure to be
updated with the market trends. We will achieve these goals by using the following:
Word of mouth
This method is the most important method, as the people who promote the company also give
their own opinion of the company and its people, and it is part of both the Mission and the Vision
of the company. The level of trust the potential customers give to this method is very high,
because it is not the company promoting itself, but rather their own friends who they trust and
whose opinion they are more likely to listen to. The disadvantage is that the company initially
can only rely on friends, neighbors and acquaintances to spread the word, and has little control of
what is said.
Company Facebook Page
The company will have its own Facebook page which serves several purposes, as it is used for
people to contact the company, to request the company’s services, an informational purpose and
of course, the promotion purpose. The Facebook page will provide links to other locations where
the company is also promoted, as well as references to the partnerships with food stores,
veterinarians and animal associations. The page will also show a few references and mention that
potential clients may ask for contact with references. The Facebook page should also be updated
often with interesting facts, funny images and other appealing information, so as to keep it in the
newsfeed of its friends and as such keep the company in the mind of the clients.
Brochures/Fliers
The company can leave brochures and flyers with its partners, such as pet stores, veterinaries
and pet associations, as well as with the local stores which will allow it, such as coffee shops.
This last group should be places where people often stop and stay for a bit and if they are
interested or know someone that might be interested they may take the fliers of brochures with
them and later search for more information in the website or the Facebook page.
Business Cards
Business cards will be for start handed out to all potential clients and given to family and friends
to pass out. On business cards we will state the hotel name, phone number, location, e-mail
address and web site. On verso we will print a small map. The existence of business cards that
business can deliver to both first time clients and potential clients is a good way to pass the idea
of personalization as well as a possibility of a connection with the service provider which may
increase the trust.
From other businesses
Arranging partnerships with other businesses which reach out target market can be very
effective. We are thinking at vet offices, pet supply stores, pet shops, pet sitters, dog walkers and
trainers. These people are meeting with our target market daily and are frequent in a position to
refer our services to their clients, if they will be convinced that we are offering good services.

23
Consumer Analysis (Market Segmentation)
In order to understand what are the main customers that a company has or will have, as well as
how to best address them, it is important to segment the market using several criteria.
Afterwards, using those segments it is possible to define first, what the target-market is, in other
words, what are the characteristics of the customers and secondly, how the company will
position itself to reach those clients.
Firstly, the demographic criterion age will be studied, secondly it will be the geographic criterion
type of area and lastly the social criterion social class will be studied.
Pet Pals Pet Hotel’s target markets are people who truly look out for their pets’ best interests and
can afford a pet foster family. Pet crates are sufficient in terms of the care of a dog while
someone is on vacation; however, the pets are never truly happy. This is quite understandable;
you would not like to be locked up in a sterile crate setting around lots of other pets who are
upset and vocal about it. Pets from crates typically come back dirty, with a strained voice, and
quite unhappy. Most people write off the experience as an unavoidable cost of owning a pet and
traveling. Pet Pals Pet Hotel is targeting the market of people that believe there should be another
alternative for the care of their dog.
Most will be from double income homes with high profile jobs that require an extensive amount
of time away from the home. Our target market consists of men and women primarily between
the ages of 35 and 65. They live in the upscale suburbs surrounding the metropolitan area. Our
market segment customers will lead a lifestyle in which their canines play a large part, and these
pets are often seen as "children" by their owners.
The other component of the target market is the customers must have enough money to cover the
difference in cost, up to 80% more a day than a crate. Not everyone can afford this price
variance. The typical customer will have a household income above Nrs. 600000 annually.

Consumer Persona
Persona: Ramesh Thapa, Hardworking Project Manager
Background
Demographics
Age: 35
Marital Status: Married
Children: 2 (One girl and one boy)
Earns monthly income of Rs. 68000 by working on different projects
Description
 Hardworking Employee
 Educated (MBA, Project Management)
 Makes living by managing projects
 Extreme Pet lover
 Had one German shepherd, a Parrot and recently bought a Rabbit

24
  Struggling to manage pets during day time as his wife also goes to office and children
goes to school
Goals
 To provide proper care to his pets despite his and his family’s busy schedules
 To treat his pets like his family members
 To spend certain amount of his earnings on his pets for providing them cozy lifestyle
He is a pet lover, he loves spending time with pets. He wants to create safe, secure
environment for his pets in absence of him and his family. He wants his pets to enjoy like his
family members does.
Challenges
 He and his family cannot look after pets during their school and office hours
 They have to ask their neighbors to look after their pets in their absence
 Neighbors are not always free as well to look after their pets
 They don’t have any reliable friends, place to leave their pets in their absence
 He wishes that if there could be any reliable place where he could leave his pets without
any doubts
We as “Pet Pals Pet Hotel”- can help him by:
 Providing care to his pets in a homely environment
 We can update him about his pets anytime he asks for so that he would not feel worry for
his pets
 We can provide Pick-up and drop facilities for his pets considering his and his family’s
busy schedule
 We can provide various customized service for his pets upon his request

Real Quote (From the perspective of primary persona)

 I am so busy, I don’t know if I find a leash or lost my dog

Marketing Campaign
With the increase in busy schedules of the people, the love for pets among the people also seems
increasing. These days each of the next homes seems having pets but due to their busy schedules
they are not being able to provide proper care, affection to their pets as they wanted to. For that
purpose, we need to make them believe that our Pet Pals Pet Hotel is here to look after their pets
in their absence. We will look after their pets like they do. We are here to decrease their anxiety
about their pets in their absence.
We provide proper care, grooming facility to pets. We have day care and overnight service
facilities for pets keeping busy and frequent travelers pet owners into consideration. We also
provide different customized service to pets upon the request of the owners.

25
Marketing and Growth Strategy
 Pet Pals Pet Hotel’s marketing approach will be using guerrilla marketing tactics in order
to be as cost effective as possible. For this, various attention grabbing pamphlets arousing
curiosity among the people will be distributed.
 Social media marketing techniques will be extensively followed.
 In addition to this, we will speak with several well-respected veterinarians and provide
them with several free day coupons in our pet hotel. This will be done to develop
business that will then report back to the veterinarian. Once a good review is passed back
by the veterinarian, this will become a good source of customers for us.
 Once Pet Pals Pet Hotel has received initial business it will not take long before very little
marketing will be needed to further grow the business. Lastly, a website will be
developed as a tool to communicate information about Pet Pals Pet Hotel to information
seekers.

Positioning Strategy
We position our hotel as specialized for premium pet accommodation at a premium price for
overnight care and we intend to be the first who will focus on pet boarding and grooming
facilities.
Positioning Statement:
As our positioning statement we provide a unique social experience for pets and create a new
standard for pet care. We are committed to the standards of excellence and go even further in
creating an environment that is healthy and safe for pets. We have set out to create a facility that
exemplifies what we ourselves would want for our pets. Your pet will have a fun safe place to
play during the day and a secure night time environment. Our staff will go to any lengths to
make our guest's stay a true delight. We will create the environment of home away from home to
your pets.
Brand Mantra:
We have set following brand mantra for our business:
“Trust your pets with the Best”

With this brand mantra we are trying to convince our clients or customers you can leave your
pets in our hotel safely with great trust and we will provide you with quality service. We are the
best choice when you seek anyone to care for your pets may it be day care or overnight stay.

POP and POD:

POP AND POD for our business as compared to our competitors can be stated as:

26
Table no. 4: POP and POD
POP POD
Focus inside Valley Overnight Stay for pets
Provides Boarding Facility Groomers for pets
Provides safe environment for pets Customized service upon request
We don’t breed pets
They focus only on dogs but we focus on
variety of pets

Competitive Edge
Pet Pals Pet hotel is the first pet daycare, boarding facility of its kind. Never before has there
been a place where a pet owner could take their pets to be cared for in their absence. The owner
feels no guilt in leaving the dog because it is a secure, safe and fun environment. To stand out
from others, we intend to offer additional services to or core boarding services for the different
pets. These additional services are; pet boarding facilities, pet bathing, pet grooming, pet
walking, pet snacks, pet accessories, giving or medication to pets. We are confident that even
though or competitors might offer some of these services, they won’t offer all and that will make
us stand out.
How will you survive, compete and grow in the market sustainably?
It is a known fact that the future of any business lies in the numbers of loyal customers that they
have, the capacity and competence of the employees, their investment strategy and of course the
business structure. If all of these factors are missing from a business (company), then it won’t be
too long before the business close shop.
One of our major goals of starting Pet Pals Hotel is to build a business that will survive off its
own cash flow without the need for injecting finance from external sources once the business is
officially running. We know that one of the ways of gaining approval and winning customers
over is to offer our pet sitting cum pet day care services and pet related business a little bit
cheaper than what is obtainable in the market and we are well prepared to survive on lower profit
margin for a while.
Pet Pals Hotel will make sure that the right foundation, structures and processes are put in place
to ensure that our staff welfare is well taken of. Our company’s corporate culture is designed to
drive our business to greater heights and training and re – training of our workforce is at the top
burner of our business strategy.
As a matter of fact, profit-sharing arrangement will be made available to all our partners and
staffs and it will be based on their performance. We know that if that is put in place, we will be
able to successfully hire and retain the best hands we can get in the industry; they will be more
committed to help us build the business of our dreams.
D. Marketing Mix
 Product/ Service

27
 The main service our small company will offer is accommodation for pets. Our hotel will
lodge pets for bigger period of time (overnight care service) or only for the duration of
the day (daycare service). Additional to this we have in offer other services like:
grooming and spa, training and transportation for pets. All services offered are premium,
high quality, at the highest standards. Comparing with other competitors who have pet
accommodation like second activity, our company will be focused on boarding services.
Our clients will leave their dog in a place which is offering safety, excellent conditions
for accommodation and daily activities, medical surveillance performed by highly trained
staff with a lot of love for animals.

 Price
Pet Pals pet hotel will be priced at the upper edge of what the market will bear,
competing with similar types of services in the area. For our luxury services we will
charge premium prices which will reflect our position on the market and the targeted
segment of clients. Comparing to other facilities that are offering “hotel” conditions for
pets, we have the same price level. Comparing to simple boarding houses or kennels, our
prices are a little bit higher.
Accommodation services for pets are undeveloped, the industry being in introductory
phase and the offer is very low comparing to the potential market. The prices our
competitors have are not all the time in connection with the level of services, conditions
and facilities. We strongly believe that targeted clients, people who are very emotionally
involved with their pets will find our offer very good from cost-efficiency point of view.
Taking into consideration the forecasted occupancy degree, will allow us to have profit
from the first year and to pay off our investment in five years.

 Promotion
Our company is a new business with no existing marketing activities. Therefore, creating
new brand image and spreading awareness about the business will be prioritized. A well
designed logo, business cards need to be prepared. Social media platforms like Facebook
and Instagram will be used extensively to promote the business. We will print pamphlets
and distribute around offices, pet food stores, veterinaries. Also, word of mouth will be a
preferred means of promotion.

 Distribution
When it comes to service distribution, or placement, there are two things to consider.
First of all, how the customer will reach the company to request the service has to be
considered, and secondly the area of operation, which is where the company will act.
When it comes to the distribution channel, that is, how the customer will reach the
company, it will be a direct channel, as the client will contact the company either through
the website, or through a phone call. While the main booking should be through a phone
number, as a personalized service should always give the clients a way to reach them
more immediately. Talking with someone over the phone is also another way of
increasing the trust the potential customer may have with the company.
In terms of which location to operate in, we decided to focus in Kathmandu valley itself.
It is because it best matches with the demographics of the customers our business is

28
 seeking. Therefore, our business in located in Satdobato, Lalitpur which will be a feasible
place for the customers residing in all parts of Kathmandu valley i.e. Kathmandu,
Lalitpur and Bhaktapur.

 Process
The most important goal that Pet Pals pet hotel needs to make sure it reaches is that the
clients trust the company as well as its people. To do this there are several processes that
the customer need to be aware of as a way to increase his or her trust and inspire
confidence in the company.
The second aspect to consider, are forms which the pet groomers will fill by asking the
clients about the characteristics of their pets. This is important not only because, as each
animal is different from all the others it will help in providing a better service, but also
because it gives the idea of professionalism which can increase trust. The third aspect of
the process of the service that needs to be explained to the client is the fact that the pet
care takers will need to have information regarding the pets’ medical history as well as
behavioral history. In case there is an emergency situation resulting out of pets’ behavior
or medical condition, this information will prove to be of great significance.

 Physical Evidence
First of all, the name and logo will be the noticing evidence for customers to recognize
us. The building premises of Pet Pals Pet hotel will also be the physical evidence for the
potential customers.

 People
The people are the most important aspect in any service, as they are the ones who are
directly responsible for its quality. In this case they are even more important, as the client
will be allowing them to take care of and trusting them with their pets. In this business,
employees are very important. We will focus on hiring the people who possess complete
knowledge on what is expected from them, adequate tools and trainings to fulfill their
work, and most importantly have love for pets.

9. Production/Operation Plan
Location
Being in the right location is a key ingredient in a business's success. If a company selects the
wrong location, it may have adequate access to customers, workers, transportation, materials,
and so on. Consequently, location often plays a significant role in a company's profit and overall
success. Formulating a good location strategy involves factors related to the availability of
potential customers matching the demographics of business, feasibility, logistics, labor,
infrastructures, and access to suppliers and so on. Generally, this means a good location strategy
will help to maximize opportunity for business while minimizing costs and risks.
Keeping all these factors in mind, Pet Pals pet hotel has chosen Satdobato, Lalitpur as a suitable
location. The land for constructing our pet hotel is located at a distance of 1 kilometer from the
ringroad and is privately owned by one of the founders. Today, it is extremely difficult to find a

29
land with a huge area in Kathmandu valley, that too near the ringroad. For this reason, our choice
to use the founder’s land for our business seems cost effective .Also, as our business is mainly
targeted towards the residents of Kathmandu valley i.e. Kathmandu, Lalitpur and Bhaktapur, its
proximity to the ringroad will make it accessible to these targeted areas. Lastly, the veterinary
hospital located in Lagankhel is within a distance of few minutes’ drive from our business
location, which will be of great help in emergency situations.
Infrastructure Build up and Facilities/ Layout
At just one block inside Satdobato, the land for our business location is situated. The land area is
approximately 10952 sq. ft which will be further used for constructing a pet hotel. However, the
total area will be further partitioned into a hotel, open ground for pets and parking space.
To set up the pet hotel we need a number of subdivided workspaces: an area for our staff to take
a break, a reception area to greet clients and accept payment, area for pets to rest and sleep, and
an office for filling paperwork and making phone calls. We also need to equip these areas with
the right equipment and supplies.
Pet Pals pet hotel will have nine rooms out of which five rooms will be used for providing spaces
for each type of pets to sleep in, one store room, one room for employees to take a break, one
room for reception and accounts and one room for the manager. We also ventilate the building so
that there is no offensive lingering pet odor and to reduce airborne viruses, cool or heat it to a
reasonable temperature as needed, and provide natural or artificial lighting for pets and
caretakers. This helps our pet hotel to be germ and odor free. Most clients should notice that it
smells really clean and fresh. The play area is outdoors since we have a large area suitable to the
pets. Outdoors, we will build a wall to keep pets of all sizes secure. This means taking a look at
where little pets could squeeze out, where diggers could tunnel out, and where jumpers could
make it up and over.
We also considered the landscaping, as seen in the following perspective:

Figure 1: Infrastructure Layout

Time Plan/ Work Schedules

30
 We are planning to start the business approximately 4 months before actually starting the project
formally. The following activities have been listed that need to be undertaken before operating
the business.
Table no.5: Time Plan/ Work Schedules
S.N Activities Duration in Weeks
1. Preparing the business plan 3 weeks
2. Registering the business 1 week
3. Renovating the building 4 weeks
4. Setting up the rooms and office area 2 weeks
5. Hiring manpower 2 weeks
6. Contacting the suppliers 1 week
7. Marketing activities 3weeks

Operation Process

 Plants/Machineries
We have not invested heavily on anything that is automated or dedicated to operate special
operations.
 Technology
Although Pet Pals pet hotel is a pet care business, technology plays an important part in the
operation of our business. We will install CCTV surveillance cameras in our premises for
better inspection and control of pet handling activities. Likewise, our marketing activities
will be mostly based on technology i.e. through social media networking sites.
 Skills required
As our business is based on service delivery, it is very much dependent on the human
resource. The human resource should be hired keeping in mind the necessary certifications,
trainings and qualities important in pet handlers and groomers. Also, the human resource
should have a feeling of love towards animals. Apart from these, the other skills required are
as follows;
 The ability to handle animals patiently, gently and confidently.
 The ability to cope with upsetting situations like working with injured or badly
treated animals.
 A willingness to do dirty or unpleasant tasks.
 The ability to take responsibility for the duty of care of animals.

31
Operations Flowchart
The following process shows the operation flow of Pet Pals pet hotel:

Customer contact

Discuss what the customer wants

Receive the pet/ Pick the pet

Handover the pet to the care takers

Monitor the handling of pets

Handover/ Deliver the pet to their owners

Figure 2: Operations Flowchart

Quality Control/ Assurance

For the quality operation in Pet pals we make sure that we hire right employees so that they
devote their time in providing effective service. Hiring right people for the right job will assure
quality work in our business. Also, creating friendly environment between customers and
employees will help to promote better efficiency in the work.
Feedbacks from the employees will be taken and suggestion and feedbacks from each employee
will be valued so that they feel belongingness towards the organization. Also, proper supervision
will be kept on each individual. The system of reward for better performing employees will be
kept for motivating the employees.

Research and Development:

Research and Development involves researching the market and customer needs and developing
new products and services. Businesses that have Research and Development strategy have a
greater chance of success than businesses it doesn’t. As the concept of pet care hotel is new in
the context to our country we encounter new developments, innovations, improvements in
existing processes and learn with the every passing time. Development is a continuous process of
improvement which can only be achieved by a highly qualified and well-trained staff. The
strategy can lead to improvement and increased customer awareness and trust towards the
business that we are targeting and the market where we are operating.

10. Organization/ Management and Human Resource Plan

32
  Organizational Structure
Organization structure usually defines a specific hierarchy within an organization. A good
organizational structure brings about a sense of purpose. The organizational structure of Pet
Pals pet hotel defines each employee’s jobs and responsibilities. It gives a graphical
representation of how our organization is shaped. An organizational structure consists of
activities such as task allocation, coordination and supervision which are directed towards the
achievement of organizational aims.

Founders
Founders

Manager
Manager

Administrative
Administrative Operation
Operation Staff
Staff
Staff
Staff

Accountant
Accountant Receptionist
Receptionist Pet
Pet Care-takers
Care-takers Pet-Groomers
Pet-Groomers Security-guard
Security-guard Cleaners
Cleaners

Figure
3: Organization Structure
The organization structure of Pet Pals pet hotel is based on a tree-like hierarchy following a
functional organizational structure. As we are in the initiating phase of our business, only one
manager will be appointed to look after the activities of the business as well as employees. Here,
the employees will be divided on the basis of functions performed by them as administrative
staff and operational staff and report to the manager. The organization structure will allow for
two way communication between the manager and other staff.
However, with the expansion of our business activities in the future, we will increase the number
of employees and appoint separate managers for administrative and operational functions.

33
  Communication Structure

Figure 4: Vertical and Horizontal Communication Structure

The communication in our Pet Pals Pet Hotel will be both vertical and horizontal among the top
level management and employees. The communication will take place with the proper
coordination among the concerned personnel. The communication can be oral, written or as per
required by situation. The flow of information will be both up and down the chain of command
and between the same levels of employees. As there are only few employees for the Pet Pals at
initial we won’t be having much problem in the communication process.

 Job Description of Key Positions and Employees

Co-founders: Both Ms. Pragya Budhathoki and Ms. Seeprata Parajuli are the owners of Pet Pals
pet hotel. As it is a small business, delegating specific roles and responsibilities to each co-
founder might be difficult. Keeping this in mind, both of them hold equal power and authority
regarding business activities. Most of the important decisions will be made by the involvement
and agreement of both co-founders.
The major roles and responsibilities of the co-founders will be as follows;
 Increase management’s effectiveness by recruiting, selecting, orienting, training,
coaching, counseling, and disciplining managers; communicating values, strategies, and
objectives; assigning accountabilities; planning, monitoring, and appraising job results;
developing incentives; developing a climate for offering information and opinions;
providing educational opportunities.
 Responsible for providing direction for the business
 Create, communicate, and implement the organization’s vision, mission, and overall
direction – i.e. leading the development and implementation of the overall organization’s
strategy.
 Responsible for signing checks and documents on behalf of the company
 Evaluate the success of the organization.
Apart from the co-founders, the business employs a manager and number of staff further divided
into administrative and operational staff. Their positions in the business along with job
description are described below;

34
Manager
A manager will be hired to oversee the activities concerning the business. Also, the
administrative and operational staff will work under his guidance and seek assistance and
suggestions whenever necessary. He will act as a bridge between the top management i.e. the
founders and the staff. Looking at the complexity involved in the job, s/he should have a
master’s degree in business with at least 3 years of work experience to be hired.
The key role and responsibilities will be as follows;
 Responsible for overseeing the smooth running of Pet hotel
 Coordinates all activities that take place at the pet hotel
 Maintaining office supplies by checking stocks; placing and expediting orders.
 Inspecting the facility and completing preventive maintenance requirements; calling for
repairs.
 Responsible for training, evaluation and assessment of employees
 Defines job positions for recruitment and managing interviewing process
 Carrying out staff induction for new team members
Accountant
An accountant will be hired to keep the record and maintain financial records. S/he should
have completed at least bachelor’s degree in business and have a minimum 2 years of
experience in the field of accounting. The key roles and responsibilities of the accountant
will be as follows;
 To prepares all the financial records and statements on behalf of the hotel
 In charge of issuing vouchers and receiving cash on behalf of the hotel and monitoring it
as well
 To draft the budget in collaboration with the senior manager and co-founders
 Responsible for financial forecasting and risks analysis.
 Responsible for developing and managing financial systems and policies
 Responsible for administering payrolls
 Ensuring compliance with taxation legislation
Receptionist
Another administrative staff in our business will be a receptionist who will be in charge of
answering enquiries from clients on behalf of the hotel. S/he should have completed higher
education and be well experienced in handling customers and their queries. Apart from
educational qualification and experience, s/he should have a smart personality and possess
good knowledge in English and Nepali.

35
 As our business is in the initiating phase, the workload will not be much for the receptionist.
Therefore, s/he will also be responsible for updating information in our Pet hotel’s social
media accounts. Other key roles and responsibilities will be as follows;
 Welcomes / receive clients and their pets by greeting them in person or on the telephone;
answering or directing inquiries.
 Ensures that all contacts with clients (e-mail, walk-In center, SMS or phone) provides the
client with a personalized customer service experience of the highest level.
 Through interaction with clients on the phone, uses every opportunity to build client’s
interest in the company’s products and services.
 Manages administrative duties assigned by manager in an effective and timely manner.
 Consistently stays abreast of any new information on Pet hotel’s services, promotional
campaigns etc. to ensure accurate and helpful information is supplied to clients when they
make enquiries
 Receives parcels / documents for Pet Hotel.
Pet care-takers
One of the most important staff required for our business is pet care-takers. As the business
model is based on pet-care, its success directly depends on the quality of people hired and
service delivered by them.
In the initial phase, we will be hiring one pet care-taker who has the necessary certifications, is
well-trained and has an experience in dealing with pets. Also, he should be animal lover ready to
cope with upsetting situations like working with injured or badly treated animals.
Their key roles and responsibilities will be as follows;
 Preparing food mixtures and feeding pets.
 Checking water levels in each kennel or crates several times/day and refilling if
necessary.
 Responsible for yard supervision during socialization activities and playgroups.
 Ensure safety of all pets being able to recognize signs of changing temperaments
and/or aggressive behavior and intervene prior to and/or during scuffles between pets.
 Walking the pets and playing with them to keep them active.
 Responsible for observing all dogs for signs of sickness or injury and reporting to
manager on duty as soon as possible.
 Providing necessary medication to sick pets.
Pet groomers
Apart from pet care takers who will look after the pets’ feeding and safety, pet groomers will
also be hired by our business. Initially, one pet groomer will be hired whose main duty will be
concerned with maintaining pets’ physical appearance. The groomer will need to possess the
necessary certifications in pet care as well as be well experienced.
He will be responsible for jobs involving brushing and cutting the fur, clipping nails, cleaning
ears, bathing, drying and finally styling the fur occasionally as well as on special request.

36
Security Guard
As we will be caring for a number of pets under our business, their security will be a major
concern for us. To avoid incidents like pet thefts or any kind of possible harms, we will be hiring
a security guard as well.
His roles and responsibilities will be as follows;
 Patrolling the premises to ensure that it is safe and secure
 Scrutinizing incomings and outgoings of clients, staffs and their properties
 Carrying other duty as is determined by the human resources manager
Cleaners
Another staff under our operation function will be cleaners. As our pet hotel will cater to a
number of different pets, there is a possibility of odor and air-borne viruses spreading. To
prevent this from happening, it is extremely important to maintain a clean and hygienic
environment. Therefore, we will be initially hiring one cleaner for maintaining the overall
cleanliness in the pet hotel
The major roles and responsibilities of the cleaner will be as follows;

 Ensure that the administrative and operational areas are clean.

 Post-feeding cleanup of bowls/facility.
 Ensures that toiletries and supplies don’t run out of stock
 Ensuring that each kennel is cleaned and disinfected each day and also periodically as
needed throughout the day.
 Responsible for facility cleaning after each exercise/yard session.
 Sweeping, mopping, trash removal and feces clean up.

Human Resource Management Aspects

HR Planning- Recruitment, Selection procedures etc.
Human Resource Management is a very important aspect of an organization’s function as it
ensures that a company’s most valuable resource is properly catered for. Pet Pals pet hotel does
not involve any departmentalization as this is a small business. We will be forming departments
related to various activities in the future with the business growth. We will consider everyone
involved in our business as a team member rather than an employee which will help in creating a
better working environment in our pet hotel.
We have already carefully identified the required human resource for the activities involved in
our business. As our business is focused on taking care of pets and grooming them, we will be
following a well-planned and careful recruitment and selection process. We will set the selection
criteria including educational qualifications, experience and skills depending on the job. In
relation to vacancy announcement, we will be considering e-recruitment due to its cost-

37
effectiveness and outreach. The next process will include receiving job application along with
CV and interviewing the screened candidates. After completing the interviewing process, special
emphasis will be given on conducting background check to know about the candidate’s work
history with pets. Only then, the job will be offered to the selected candidate.

HR Administration
Rules and Regulations:

o Employees should not come to work with any infectious diseases or when ill to prevent
an outbreak from occurring. It's important to wash hands frequently throughout the day to
prevent the spread of germs between worker and pets. Toys should be sterilized and
wiped down at the end of each day.
o Employees should be watching their assigned pets at all times to prevent injury or other
issues.
o Employees should be familiar with the policies and procedures of their workplaces, such
as times of pickup and drop-off for pets.
o Employees need to remember they are caring for other people's pets in their absence.
Appearance and attitude are extremely important when dealing with people and their
children.
o Employees should dress casual and comfortable, but not sloppy.
o Maintain the pet’s daily report sheet as well as their file.
o Staff may not engage in extended social chats, any form of social engagements during
work hours.
o  Beating and pinching is strictly prohibited and we have zero tolerance for it the caregiver
will be removed from work.
o Unannounced, unpermitted leave is strictly prohibited.

Facilities

o Clean workplace
o One time meal
o Spacious working environment
o Overtime bonuses
o Certain funds allocated for staffs in case of injury as they have to work with pets

Human Resource Development- Training/ Development, Motivation, Retention etc.

We will focus not only on growing the business but also on employees’ personal growth. In-
house trainings will be conducted by experts in a regular interval. If required, we have also
planned to arrange motivating and refreshment programs.
The dependency factor for our business is the skill of employees. Keeping this in view, we have
planned an attractive compensative for employees showing consistent improvements in their

38
performance. We believe this will help to retain skilled employees ultimately adding goodwill to
the business.

11. Financial Plan:

Financial Objectives
Pet Pals pet hotel will start small, and its main objectives will be to make an entrance to the
market and reach the potential customers in a short period of time. Therefore, business may have
to bear loss in the first year because of the new service being introduced in the market. This will
help to grasp more customers for the second year onwards. We decided to start with
bootstrapping the business on which both the partners will be contributing half of the total start-
up cost. We will start to pick up pace after the second year when customers will be increasing
and in the long-run, we will start investing on the business heavily for expansion outside the
valley.
The financial objectives set for our business are as follows:
1. To launch the business and develop sales approaching NRs. 150000 per month by the end
of the first year.
2. To increase members by 50% by the second year.
3. To break even in the third year, and be profitable by the fifth year.

Assumptions
Our financial plans are based on the assumptions. So, some of the basic assumptions are listed as
below:
o Account receivable is not maintained as we will not provide service on credit
o All the operating expenses are increased by 12% every year
o Yearly salary will be increased by 4-5% depending upon the performance.
o Depreciation on furniture will be 5 % and machinery and equipments will be 10% using
straight line method.
o Just in time inventory is implemented.
o Renovation will be done in an interval of five years.
o Customers will be increased by 30% till third year and start increasing by 40% third year
onwards.
o 50% of customers will be using pick up and drop facility.
o Service charge will be increased by 5% third year onwards.
o Merchandise sales will be increased by 20% each year.
o Revenue from commission will be increased 30% yearly till the third year and 40% third
year onwards.
o Total revenue will be increased by 50% till the third year.
o Employees will be added as per the need after the breakeven point.
39
 o For the first two years, tasks related to front desk and accounting will be done by the
same employee.
o The work related to pet grooming and care taking will be done by one employee for the
first year and the number will be increased accordingly.
o One of the co-founders will look at the management of the pet hotel and perform the
tasks as the manager.
o We have assumed that demand for the service will be increased so sales will also
increase and there is no increase in fixed assets as well hence, the output of fixed assets
turnover ratio may result higher.

Start-up Capital:
Table no.6
S.no Particulars Amount (Rs)
1 Machinery and Equipment 150600
2 Furniture and Fixtures 150800
3 Inventory 34820
4 Preliminary expenses 260,000
5 Cash 75,000
  Total Start-Up Cost 671,220

Capital Structure
Table no. 7
Capital Structure
Owner’s
671220
investment
Bank loan -
Total 671220

Revenue Projection

Table no. 8: Revenue Model

S.N. Particulars
1 Revenue from service charge
2 Revenue from merchandise sale
3 Revenue from commision
4 Revenue from pick and drop
Total Revenue
Year 1 Year 2 Year 3 Year 4 Year 5
405000 582000 923700 1311200 1622500
84000 100800 120960 145152 174183
96000 121800 162240 227136 317990
86400 202500 303750 455625 683438
671400 1007100 1510650 2139113 2798111

40
 Calculation of depreciation of furniture and fixture
Table no. 9
Particulars Year 0 Year 1 Year 2 Year 3 Year 4 Year 5

Furnitures and Fixtures 150800 150800 143260 135720 218430 206140

Purchases 95000 60000
Total 150800 143260 230720 218430 266140
Depreciation@5% 7540 7540 12290 12290 15290

Accumulated Depreciation 7540 15080 27370 39660 54950

Book Value 150800 143260 135720 218430 206140 250850

Calculation of depreciation of machinery and equipment

Table no.10
Particulars Year 1 Year 2 Year 3 Year 4 Year 5

Machinery and Equipments 150600 135540 120480 105420 90360

Depreciation@10% 15060 15060 15060 15060 15060

Accumulated Depreciation 15060 30120 45180 60240 75300

Book Value 135540 120480 105420 90360 75300

Details of Operating Expenses

Table no 11
Particulars Year 1 Year 2 Year 3 Year 4 Year 5
Salary 360000 425400 534000 800200 1104000
Lighting and heating 7000 9800 11500 13000 14800
Internet expenses 8000 8000 8500 8500 8800
Water 6000 6000 7800 9000 12500
Telephone expenses 2400 3000 3600 4440 4000
Marketing expenses 10000 8000 8200 6200 6500

41
 Maintenance 12000 13500 14200 18700 21000
Miscellaneous expenses 10500 11200 14000 27000 23500
Vehicle lease 120000 120000 120000 120000 120000
Total cash operating expenses 535900 604900 721800 1007040 1315100

Income Statement

Table no. 12
Particulars Year1 Year 2 Year 3 Year 4 Year 5
Revenue from service charge 405000 582000 923700 1311200 1622500
Revenue from merchandise sale 84000 100800 120960 145152 174183
Revenue from commission on sales 96000 121800 162240 227136 317990
Revenue from pick and drop 86400 202500 303750 455625 683438
Total revenue 671400 1007100 1510650 2139113 2798111
Less: Operating Expenses
Cash Operating Expenses 535900 604900 721800 1007040 1315100
Operating profit before depreciation (EBDIT) 135500 402200 788850 1132073 1483011
Less: Depreciation 22600 22600 27350 27350 30350
Operating profit bedore tax (EBT) 112900 379600 761500 1104723 1452661
Less: Tax@15% 16935 56940 114225 165708 217899
Net Profit after Tax (NPAT) 95965 322660 647275 939015 1234762

Statement of Retained Earnings

Table no.13

Paticular Year 1 Year 2 Year 3 Year 4 Year 5

Opening Balance 95965 322660 647275 939015

Add: Profit for the Year 95965 322660 647275 939015 1234762

Less: Dividend

42
 Closing Balance 95965 418625 969935 1586290 2173777

Balance Sheet

Table no. 14
Particulars Year 1 Year 2 Year 3 Year 4 Year 5 Year 0

Current Assets
Cash 479385 820145 1391805 1922310 2466847 75000
Inventory 9000 13500 20500 38700 52000 34820
            260000
Total CA 488385 833645 1412305 1961010 2518847 369820
Fixed Assets
Furnitures and Fixtures 150800 143260 135720 218430 266140 150800
Less: Depn 7540 7540 12290 12290 15290
NBV of furniture 143260 135720 123430 206140 250850 150800
Machinery and Equipments 150600 135540 120480 105420 90360 150600
Less: Depn 15060 15060 15060 15060 15060
NBV of Machinery and Equipments 135540 120480 105420 90360 75300 150600
Total FA 278800 256200 228850 296500 326150 301400
Total Assets 767185 1089845 1641155 2257510 2844997 671220
Liabilities and Equity
Retained Earnings 95965 418625 969935 1586290 2173777 0
Capital 671220 671220 671220 671220 671220 671220

Total Liabilities and Equity 767185 1089845 1641155 2257510 2844997 671220

43
 Cash Budget

Table no.15
Particular Year 0 Year 1 Year 2 Year 3 Year 4 Year 5
Opening Cash 0 75000 184565 516325 1170450 2098115

Cash Inflow:
Revenue from service charge 405000 582000 923700 1311200 1622500
Revenue from merchandise sale 84000 100800 120960 145152 174183
Revenue from comission on sale 96000 121800 162240 227136 317990
Revenue from pick and drop 86400 202500 303750 455625 683438
Equity 671220
Total Receipts 671220 746400 1191665 2026975 3309563 4896226
Payments:
Machinery and Equipments 150600
Furniture and Fixtures 150800
Preliminary expenses 260000 0 0 0 0 0
Operating expenses 535900 604900 721800 1007040 1315100
Inventory 34820 9000 13500 20500 38700 52000
Tax paid 16935 56940 114225 165708 217899
Total Payments 596220 561835 675340 856525 1211448 1584999
Surplus 75000 184565 516325 1170450 2098115 3311227
Closing Cash 75000 184565 516325 1170450 2098115 3311227

Key Financial Indicators

Table no. 16: Ratio Analysis

Particular Year 1 Year 2 Year 3 Year 4 Year 5

Profit Margin 14.29% 32.04% 4.28% 42.82% 44.13%
Total Assets Turnover 87.51% 92.41% 92.05% 97.15% 98.35%
Fixed Assets Turnover 240.82% 393.09% 660.10% 739.67% 857.92%

44
 Return on Assets 12.51% 29.61% 39.44% 41.60% 43.40%
Return on Equity 12.51% 29.61% 39.44% 41.60% 43.40%

Investment Appraisal:

 Net Present Value (NPV)

Year Cash Flow PVIF @14% PV

1 95965 0.8772 84180.5
2 322600 0.7695 248240.7
3 647275 0.675 436910.6
4 939015 0.5921 555990.8
5 1234762 0.5194 641335.4
TPV 1966658
Less: NCO 671220
NPV 1295438

Table no. 17

 Internal Rate of Return (IRR)

Table no.18

Year Cash Flow PVIF @80% PV

1 95965 0.5555 53308.5575
2 322600 0.3086 99554.36
3 647275 0.1715 111007.6625
4 939015 0.0952 89394.228
5 1234762 0.0529 65318.9098
418583.7178

 Payback Period (PBP)

Table no. 19

Year Cash Flow Cumulate Cash Flow

1 95965 95965
2 322600 418565
3 647275 1065840
4 939015 2004855
5 1234762 3239617

45
Risk and Contingency Plan:

Risk is involved in every kind of business. “Higher the risk Higher the return”. Therefore, we
must analyze various risks associated with business so that we can take further action
accordingly.

A. Key risk in the business and risk management plan

Key risk in the business

 Internal Risk:

o Disagreement between partners

o Unavailability of employees with desired skills
o Delay in opening the business
o Insufficient marketing and promotional activities
o Fear of theft of pets by internal staffs

 External Risk:

o Competitors may imitate the business idea with superior business model
o Change in the government policies
o Threat to exit the business
o Threat of attack to pets

Risk Management Plan

Some of the risks that Pet Pals can face are mentioned above and the plans made to encounter
those risks can be listed as follow:

 Internal Risk Management Plan:

o There is maximum chance of disagreement between partners in the business so, in

order to manage those disagreements proper communication process can be set up
and disagreement can be resolved through negotiation.

o If there will be difficulty in the availability of skilled employees can we can train
them for certain time period and provide them with the job.

46
 o If it is made sure that every work is being systematically and on time then risk for
delay in opening the business can be mitigated. i.e. proper supervision and monitoring
is required throughout the initials of pre-business activities as well.

o For managing risk of marketing and promotional activities it should be made sure that
proper marketing tools and marketing mix are being used in the business. Special
attention on those areas could help to manage the risk of insufficient marketing.

o To manage the risk of theft of pets by internal staffs we should keep proper eyes on
every staffs and proper details and background of staffs must be checked before
hiring the employee and proper details of the employee should be verified and
recorded by the office for the safety of pets.

 External Risk Management Plan:

o We cannot stop competitors to imitate our business so, in order to manage this risk we
should always be ready with blue ocean strategies to remain ahead of competitors so
that they can be used when and where required.

o If we keep on operating our business within the legal framework then that won’t
affect us even if the government policies changes. Government won’t make drastic
changes all of sudden so, we should operate under the framework that we can cope up
if any changes occur.

o There is the risk of exiting the business only if the performance, operations of the
business declines and the business cannot earn profit. So, in order to manage this risk
we should give proper care on every aspects of the business from operation to
marketing, service providing. If adopting proper strategies also won’t help our
business to sustain then we should be ready with exit strategy as well which will at
least provide us with our invested returns.

o There can be the chance that pets are attacked by outsiders or other pets inside the
hotel as well. So, we should make sure that there are no places from where outsiders
can attack pets or the area should be kept under CCTV Surveillance. In order to
manage the risk of being attacked by the pets inside the hotel care takers should
always be allotted with the pets so that no such incidents take place.

B. Exit Strategy

If the business gets successful then we would expand our business in other cities outside
Kathmandu Valley and we should not think for the exit strategy but if the business went
wrong then we must we ready with our exit strategy as well. As an exit strategy Pet Pals may
sell business to third party. We might hire professional broker or we might seek help of
friends or friendly individuals for selling our business.

47
 Merger can be another strategy, if any kennel clubs and other pet related firms are willing to
merge the business then we can go for that as well. This would also be helpful exit strategy
as the new management team will come up we can handover whole business to them and
receive return from there. If the above mentioned strategies do not work and business goes on
declining then the business will be closed.

Appendix:

Details of Machinery and Equipment

Year 0

Machinery and Equipment Qty Unit Rate Amount

Lighting   6 nos 300 1800  
Telephone   1 nos 800 800  
Laptop   2 nos 50000 100000  
CCTV   3 nos 16000 48000  
Total         150600  
           

Details of Furniture and Fixtures

Furniture and
Qty Unit Rate
Fixtures Amount
Tables 3 nos 1600 4800
Chairs 6 nos 1000 6000
6000
Furniture 2 nos
0 120000
Pet beds 10 nos 2,000 20000
Total       150800

48
 Details of Inventory
Year 0 Year 1
S.NO. Pet Supplies Qty Unit Rate Amount Column1
a. Crates 8 nos 2000 16000
b. Pet feeders and utensils 12 nos 250 3000
c. Toys and accessories        
  Ball launcher 3 nos 200 600 400
  Dogmex cat tower toy 2 nos 800 1600
  Pet leashes 4 nos 300 1200 600
  Total toys and accessories       3400
d. Grooming kit        
  Reusable pet fur remover 2 nos 700 1400 700
  Pet bathing/shower tool 2 nos 900 1800
Pet grooming gloves 2 pairs 500 1,000 1500
Pet nail cutter 2 nos 400 800
Pet soap 4 nos 100 400 300
Pet shampoo 4 nos 300 1200
Non slip handled comb 2 nos 110 220
Towels 2 nos 500 1000
Total grooming kit 7,820
e. Pet Food supplies        
  Drools premium dry pet food 6 pkt 600 3600 3000
  Pet-o-lac (kittens and puppies) 2 pkt 500 1000 1000
  Total Pet food supplies       4600
  Total pet supplies expenses       34,820 9000

Details of Preliminary expenses

Particulars Amount
Company registration fee 10000
Marketing budget 50000
Renovation 150000

49
Installation 50000
Total 260000

Details of Profit Margin

year Profit sales Profit Margin

1 95965 671400 14.29%
2 322660 1007100 32.04%
3 64725 1510650 4.28%
4 939015 2193113 42.82%
5 1234762 2798111 44.13%

Details of Return on Assets

year NI TA ROA
1 95965 767185 13%
2 322660 1089845 30%
3 647275 1641155 39%
4 939015 2257510 41.60%
123476
5 2 2844997 43%

Details of Return on Equity

year NI capital re equity ROE

1 95965 671220 95965 767185 13%
2 322660 671220 418625 1089845 30%
3 647275 671220 969935 1641155 39%
4 939015 671220 1586290 2257510 41.60%
5 1234762 671220 2173777 2844997 43%

Details of Total Assets Turnover Ratio

Year Sales Total Assets TATR

1 671400 767185 87.51%

2 1007100 1089845 92.41%

50
 3 1510650 1641155 92.05%

4 2193113 2257510 97.15%

5 2798111 2844997 98.35%

Details of Fixed Assets Turnover Ratio

Year Sales fix Assets Fixed assets t.o

1 671400 278800 240.82%
2 1007100 256200 393.09%
3 1510650 228850 660%
4 2193113 296500 740%
5 2798111 326150 857.92%

51